Day 2 of Google's I/O developer conference kicks off in a few minutes here, and we're covering the keynote live.

Sundar Pichai, the senior vice president of Chrome, is expected to speak this morning, and we're probably going to see the first real Chrome OS notebooks, perhaps with a $20 per month installment payment plan.

We might also hear more about Google TV and some of its favored Web development technologies like HTML5.

9:25 AM PT: We're waiting for the show to start. They're playing the same unidentifiable techno music as they did yesterday.

9:30: Here's Vic Gundotra, the exec in charge of I/O. He leads Google's social initiatives, but we don't expect to hear anything new about them here today.

More than 60,000 simultaneous viewers watched I/O yesterday. Total uniques yesterday: over 600,000.

Gundotra calls the open Web "the only platform for all of us."

Now Chrome Senior VP Sundar Pichai is taking the stage as expected. This is the "Chrome keynote."

9:33. Momentum announcements. A year ago, 70 million users had Chrome as their main Web browser. Now it's 160 million.

He's going through the history of Chrome, releasing every 6 weeks. Over 8 versions just in the last year.

A whole slew of new APIs in the last year. Focused on speed. 20% increase in JavaScript improvements. Security -- sandboxes to prevent plug-ins from affecting the rest of your computer.

HTML5 -- all modern browsers are now investing in HTML5.

Now it's Ian Ellison-Taylor, head of dev platform in Chrome.

It looks like this keynote is going to start off pretty geeky. Taylor is showing how to add speech attributes to a Web search box. Typing code on the screen.

One of the rules of keynotes is never do speech demos. But they're going to do it anyway!

It worked -- he searched for an actress and the Web site returned the right result. He says he's genuinely surprised.

Speech in Google Translate as well.

Performance also important to Chrome, has been since the early days. He's showing a chart of JavaScript performance, and says he hopes he never has to share this chart again -- JavaScript is no longer the bottleneck it used to be. Chrome is focusing on other areas where there's room for improvement.

Graphics -- GPU acceleration. .

This is something Microsoft has made a big deal about with Internet Explorer 9 and 10.

Aha -- he's using Microsoft's HTML5 "fish tank" demo page it built for IE9. First he's showing Chrome running only in software. It gets pretty slow when you get up to 100 fish.

It's much faster when you use GPU acceleration. Can get all the way up to 500 fish with no lag in performance.

Now he's showing how it looks with 10,000 fish -- a 10x performance improvement over the past. Lots of oohs and ahhs.

They're also pushing WebGL, a standard for graphics that Chrome supports.

Sundar Pichai is back now.

Next up: the Chrome Web store. It's expanding to 41 languages today. Developers can write an app and reach every Chrome user.

So how to developers make money? Charging for apps is one way, but it sounds like they're going to announce in-app payments for Web apps, as predicted.

Demonstrating how to buy a comic book within an app after a user has started reading it.

More code! In-app purchases only take one line of code.

So how do you decide how much to charge, and how to charge, for apps?

Google will take only a 5% cut. That's compared with the 30% cut Apple takes for the App Store.

It will use WebGL, but there's also a canvas version that will work on other browsers.

Because it's a Chrome Web app, there's offline storage -- you can play the entire game offline. No need for an Internet connection.

A special treat only for the users of Chrome: exclusive levels. "The Chrome Dimension."

"We're really happy to hear about the 5%. As a developer, that seems fair."

The Mighty Eagle add-on will be on Chrome as soon as in-app payments are live. Can use it to clear the levels.

Sundar Pichai is back on stage.

Eric Koblin from Google Creative Lab is up now demonstrating the future of the Web.

New sneak peek of a music Web app called 3 Dreams of Black. Very interactive, the kind of thing you couldn't do on the Web a few years ago. (It's like The Wilderness Downtown demo that Google introduced last year.) The project's not live yet, but it will be at ro.me. Other demos are at Chrome Experiments site.

Pichai is now making the case for Chrome OS. "You have to deal with all the legacy decisions from OS design over the last 30 years." Startup takes forever, back up data, antivirus software. "The experience is really really complicated."

"We wanted to distill the experience to just the Web. That's what Chrome OS is."

They are focusing on notebooks first because that's where people use the Web the most.

New name for these things: "Chromebooks."

What is different about them? Instant turn on. The first time you turn it on, you're up and running within 3 minutes. Each time after, you're up in 8 seconds. All your stuff is there with Chrome Sync.

(We've heard most of this at the Chrome OS introduction last December.)

As you buy a PC, it's great on its first day. As you add applications, they degrade over time.

We update Chromebooks over time and we think they'll get FASTER. As we add performance improvements to the Chrome browser -- like Javascript improvements -- you'll get those.

Security is built in. Everything is sandboxed -- Web pages and plug-ins can't affect rest of the computer.

They had 1 million people sign up to get a test Cr-48 notebook within 6 weeks. They shipped out thousands.

"We have fixed some issues." They're revamped the track pad. They've worked with Adobe to make sure it's a seamless Flash experience. Intel has worked to upgrade them to dual-core processor.

There were some missing gaps 6 months ago. Plug in a camera -- nothing happened. Not anymore. Here comes a demo.

(It's pretty funny that people cheer the idea that you can plug a camera into a computer and that the computer will recognize it. Isn't this Plug and Play from Windows 9x?)

There's a new media player. Can skip, pause, create playlists.

The new Google Music beta will work. So will other online services like Pandora and MOG.

Photos -- take an SD card full of photos, plug it in, and the photos will show up in a file manager in the SD card. Select photos, play slide show, and so on.

"But most important, I want to get these in the cloud as soon as possible." Picasa app has been downloaded, registers itself as a file handler. New button says "send to Picasa." Upload immediately.

(It's like iPhoto + MobileMe. Or like Windows Live Photos.)

The same thing with Google Docs -- have a document and it'll automatically load into the cloud.

APIs are built into the platform so any developer can have that same functionality. Google has been working with Box.net, can upload from Box.net as well.

"Any Web app can register and handle your local files."

Sundar Pichai makes the point: the cloud has more storage than any computer. (True, but is storage really a problem with notebooks? I have a $300 netbook with a 200GB drive on it.)

But it's not just Web. Three Google apps have been brought offline: Gmail, Google Calendar, and Google Docs. There are also third-party apps like the New York Times, games.

Finally: announcing partners again. Samsung, Acer, Intel, Verizon.

"The first Chromebook is from Samsung." 12.1 inch screen, comes in two colors -- black and black. It's $429 Wi-Fi only. With 3G, it's $499.

(Way too expensive. Zero percent chance of success.)

The second is from Acer, slightly smaller, 11.6 inches. It'll cost $399.

Also: new carriers around the world will offer the same pay-as-you-go data plans that Verizon is offering in the U.S.

Designed to be very simple to use, share with your family members.

"Jailbreaking is built in." You can play with the kernel. No control at all.

Now he's talking about businesses and schools. IT infrastructure is so complicated today that customers can't even account for the software they have. Over 50% companies still running Windows Xp because it's so complicated to upgrade. That's 10 years old.

Usage patterns have changed. Most people use laptops instead of laptops, bring them in and out of firewall.

"All this adds up as costs." Thousands of dollars per computer per year.

They're testing it with some customers like the city government of Orlando, Florida.

They took a survey and said that 75% of their users COULD switch to Chrome today. All they really need is Web.

The same Samsung and Acer Chromebooks will be available to businesses.

Samsung is also releasing a "Chrome box" -- it's like the Mac Mini, a tiny computer that you can attach to any monitor.

There's a Web console for IT admins to manage all Chromebooks -- add users, manage apps, set group policies. "Dead simple to manage."

End to end offering: Chromebooks for business. Software and hardware as a service packaged together.